Dynamic Analysis of the EU Countries Sustainability: Methods, Models, and Case Study

Abstract

The agenda for sustainable development actualizes sustainability analysis of countries’ social, ecological, and economic conditions, as well as the necessity of designing practical recommendations to realize the sustainable development goals (SDGs). Sustainability analysis is a part of decision making and policy development in a broad environmental, economic, and social context. That is why this analysis goes beyond simple technical assessment. In order to make sustainability a target variable in development strategies, it is necessary to use special methods combining mathematical tools and managerial content. The paper systematizes modern mathematical methods for assessing economic sustainability and proposes a methodology for the integrated assessment of the social, economic, and environmental sustainability of countries, which were tested on data from 24 EU countries over 12 periods. The case study results derived from spatial and temporal samples are consistent with the currently observed processes in the EU. The content basis is the UN concept of sustainable development, the instrumental basis is multivariate comparisons, the Mahalanobis distances method, the correlation and regression analysis, analysis of variance, time series analysis, and trends analysis. Composite indices of social, economic, and environmental sustainability of the EU countries, each of them including five indicators, were developed in this study; the levels of social, economic, and environmental sustainability of EU countries were determined, as well as individual instability indicators. Mahalanobis distances and relative and absolute sustainability indicators were calculated and determined. Cluster analysis of the EU countries by levels of social, economic, and environmental instability and Mahalanobis distances, the diagnosis of the current situation and dominant trends were carried out for testing the hypothesis that there are positive relations between the instability of development and Mahalanobis distances. Hypotheses about the relationship between instability and the level of country development, reflected in the values of socio-economic and environmental indicators, and whether countries with good values of social, environmental, and economic indicators are the most sustainable, were investigated.